HF 229 – Regulation of free trial offers, buying club memberships
HF 504 – Electronic delivery of insurance notices, documents
COMMITTEE ACTION:
HF 229 modifies the regulation of free trial offers and buying club memberships under Iowa’s consumer fraud law and exempts Internet sales from current rights of cancellation and limitations on membership periods. The legislation passed the House on a mostly party-line vote of 59-40, with dissenting Democrats maintaining that the proposal substantially weakens consumer protections in these areas. The Senate Commerce Committee unanimously approved amendments to clarify that “free offer” does not include enrollment in a subscription to publications, including magazines, newspapers and other periodicals that allow the customer to cancel at any time and receive a full refund for issues not yet distributed, and –after consultation with the Iowa Attorney General’s Consumer Protection Division — to adjust the bill’s language relating to door-to-door sales so that an exemption only applies to the sale of buying club memberships transacted through the Internet by a company primarily engaged in the sale of goods through the Internet. [4/1: short form]
HF 504 relates to the electronic delivery and posting of insurance notices and documents. The legislation requires that a notification of a policy cancellation, non-renewal or termination of insurance must be delivered to the customer by mail and not solely by electronic means. On February 16, the Iowa Insurance Division (IID) began the process of proposing a rule on this subject as a possible alternative to legislation. Both the rule and the bill work toward the goal of protecting consumers by not allowing electronic notice of cancellation, termination or non-renewal of an insurance policy. Addressing the concerns by administrative rule may give the IID better flexibility in this area as technological advances continue. The bill passed the House on a vote of 100-0, and the Commerce Committee recommended moving HF 504 forward to keep it eligible as an option. [4/1: short form]